Operating margins decreased due to increased COGS for transportation and material costs, including pallets, cartons, steel, and aluminum. Indicate what you would anticipate would happen to the following two variances:

Materials price variance

Would this variance be favorable, unfavorable, or no effect?

Explanation:

We are told that additional factors include higher depreciation and brewery costs associated with planned capacity additions at our Obregon production facility in Mexico. Indicate what you would anticipate would happen to the following two variances:

Variable overhead rate variance

Would this variance be favorable, unfavorable, or no effect?

Explanation:

Variable overhead efficiency variance

Would this variance be favorable, unfavorable or no effect?

Explanation:

Lastly, we are told that Constellation Brands is expecting incremental brewery costs driven by labor inflation in Mexico as well as increased headcount and training expenses to support our continued capacity expansion. Indicate what you would anticipate would happen to the following two variances as a result of this:

Labor rate variance

Would this variance be favorable, unfavorable, or no effect?

Explanation:

Labor efficiency variance

Would this variance be favorable, unfavorable, or no effect?

Explanation: